George Osborne pledges to 'fight' for nearly one million new jobs

According to the most recent statistics, there are just over 30 million people in work in the UK.

“There is no reason why Britain shouldn’t aim to have the highest employment rate of any of the world’s leading economies,” Mr Osborne said. "To have more people working than any of the other countries in the G7 group. That’s my ambition.”

For most economists, “full employment” does not mean that every adult has a job. Such a situation would fuel inflation because workers would be able to demand large pay rises, knowing employers would have to agree as there was no one available to replace them.

Instead, it often refers to a level of joblessness known as the “non-accelerating inflation rate of unemployment”, where almost everyone has work but enough people are unemployed to prevent big wage rises.

Economists differ about what that level is, but some estimates suggest that in Britain today it would be between 6 and 7 per cent unemployment. The current rate is 7.2 per cent.

Mr Osborne’s pledge will be seen as a recognition that the Government still needs to do more on unemployment despite the economy improving and the number of people in work rising.

Mr Osborne said that he could not pledge that everyone who wants a job will get one because it would be “doomed to fail”.

“While unemployment has come down, there are still over 2 million looking for a job", he said.

“It will take time to fix that. But we will not rest while we still have so much wasted potential in some parts of our country.

“That’s why today I’m making a new commitment. A commitment to fight for full employment in Britain. Making jobs a central goal of our economic plan. 70 years ago this year; during the Second World War, when Winston Churchill was Prime Minister of a Coalition Government; they set the first commitment to full employment.

“In those days they thought government could micro-manage the economy and guarantee a job for everyone.

“But - as we learnt again recently - you can't abolish boom and bust. So attempts past and present by governments to ‘guarantee’ a job to every person are doomed to fail. There are always going to be ups and downs to the economic cycle.”

Aides said that the Chancellor wants to create 900,000 new jobs by 2020.

Mr Osborne added: “A modern approach to full employment means backing business. It means cutting the tax on jobs and reforming welfare. It means improving our schools.

“It means spending less on benefits, so we can invest more in creating new jobs: by having more apprenticeships, new roads and railways, and making Britain a world leader in science.

“That is what I mean when I say that we are going for full employment.”

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